Contracts - Research Article from Encyclopedia of Business and Finance

Contracts

"A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty."

The freedom to contract has not existed throughout history. In medieval England, the courts did not engage in the enforcement of agreements between individuals. Rather, the feudal society that ruled personal interaction was relied upon for all forms of trade. As society evolved to emphasize individual freedoms over social caste, the ability to contract was viewed as a fundamental tenet of individual liberty. Writers and economic theorists such as Adam Smith, David Ricardo, Jeremy Bentham, and John Stuart Mill "successively insisted on freedom of bargaining as the fundamental and indispensable requisite of progress; and imposed their theories on the educated thought of their times."